Co-ops: the Future of Sustainable Business?
Cooperatives are often seen as being green-minded, but are they really more sustainable than businesses with more traditional set-ups?
The days a of a small hippie-run cooperative grocery store as the norm are long gone. Co-ops are now big business. Revenues for the 300 largest co-ops total more than $2 trillion globally, according to the International Cooperative Alliance, reports the Guardian.
And while corporations often get blamed for hurting the environment, cooperative advocates often hold their business model up as a blueprint for sustainability. The argument goes that because co-ops are owned by their employees or members, they have a more community-minded outlook built into their fiber than do traditional businesses.
But to say that cooperatives are inherently more green would be to simplistic, the Guardian reports.
Recent financial troubles at the Co-operative Group and Spanish appliance company Fagor — part of Mondragon, the world’s largest federation of worker co-ops — have raised concerns that the cooperative model is not truly sustainable.
Furthermore, the democratic decision making process means that trying to get member agreements for an aggressive sustainability initiative would be harder than, say, in the dictatorial board room presided over by a green-minded, all-powerful CEO, the paper reports.
Still, many co-ops have managed to overcome these issues and be sustainable businesses. Taxi co-op Union Cab, for example, added respect for the environment to its mission statement in 2009. The cooperative of 240 employees instituted a green team— its first step was to ban cab idling. The policy cut gas consumption by 3 to 5 percent across the fleet, the paper reports.
Ocean Spray, the US farming co-op known most for its cranberry juice, has set 2015 targets of reducing its water use by 15 percent and reducing its non-renewable energy use, greenhouse gas emissions and landfilled waste by 25 percent. The paper does not report against what baseline year these reductions would be judged.
In August, it emerged that the Co-operative Group was forced to put its £1 billion ($1.5 billion) pledge to invest in clean energy projects on hold after the company’s banking unit halted lending to all new business ventures.
The Co-operative Bank, a self-styled ethical bank, had been the biggest lender to onshore wind farms and other small-scale green projects. But it has cancelled new loans, leaving developers scrambling to secure new financing from mostly blue-chip European banks.
The Co-op, which outlines an updated set of ethical goals each year, was expecting to meet and even exceed its ethical lending target this year. The bank said in February it had already provided £700 million ($1 billion) of lending to a range of renewable energy projects.
But by May the company had stopped lending to new business customers in response to growing concern over its capital position.
Photo Credit: The word Co-op is magnified via Shutterstock
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